In 1996, the Service implemented the Collection Appeals Program (CAP). This program provides an administrative appeal for certain collection actions. The appealable actions were initially limited to liens, levies and seizures.

The legislative history of IRC 7123, enacted by RRA 1998, reflects Congressional intent that the CAP program be continued, although CAP is not specifically mandated by statute.

On January 1, 1997, terminated installment agreements (IA) were added to the program through the Taxpayer Bill of Rights 2, enacted July 30, 1996.

The IRS Restructuring and Reform Act of 1998 (RRA 98) followed, providing taxpayers the right to appeal the rejection of installment agreements.

Currently, CAP is available for appeals involving IA rejections, modifications and terminations, as well as liens, levies and seizures.

IRC 7122(e) serves as the authority to appeal the rejection of an IA. CAP is the program through which to file an appeal.

IRC 6159(e) authorizes an appeal of IA terminations by the IRS. Treas. Reg. 301.6159-1(e)(5) authorizes an appeal of both IA terminations and modifications by the IRS. CAP is also the available mechanism through which to file an appeal.

Part 5 (Collection Process) of the IRM is also a reference for the legal and procedural requirements that Appeals must follow in making determinations on CAP cases.

The Policy analyst shown on the Product Catalog page as the originator is the assigned author of this IRM.

Policy, Planning, Quality and Analysis (PPQA) provides trend and data analyses and detailed summary reports for Appeals.

The table below lists common acronyms used in this section:

Guidance for Account & Processing Support (APS) employees for CAP processing procedures is contained in IRM 8.20.5 (carding in) and IRM 8.20.7 (closing).

The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights.

In accordance with the Taxpayer First Act (TFA) and IRC 7803(e)(7), ATEs will ensure that “specified taxpayers” have access to the nonprivileged portion of the case file on record regarding the disputed issues (other than documents provided by the taxpayer to the IRS). ATEs will note the communications with each taxpayer regarding this issue in the case history.

“Specified taxpayers,” as defined in IRC 7803(e)(7)(C), are entitled to request access to the case file. If the “specified taxpayer” requests access to the case file, ensure that they are provided access no later than 10 days before the date of the scheduled conference (unless the “specified taxpayer” has elected to receive the file no later than the date of the conference).

Because all CAP cases are received electronically, the privileged portion of the case file should be redacted, and the nonprivileged portion of the case file should be made immediately available to the “specified taxpayer” so that a conference can he held as swiftly as possible (at least 10 calendar days after the taxpayer receives access). In general, the ATE must submit a Shared Team of Administrative and Redaction Support (STARS) request for scanning/copying and redacting of the file. However, in circumstances in which the use of STARS is impractical (for example, the taxpayer appears for an in-person conference and asks the ATE for a copy of a particular document from the file), ATEs may decide to provide access and redact the file themselves. STARS requests will be reassigned to the lead redactor who will expedite redaction services. No conference should be held until access to the file has been offered and provided to “specified taxpayers” that request access.

If the “specified taxpayer” elects to view the case file and requests a conference sooner than 10 days from access, the ATE may hold the conference and record the taxpayer’s request in the Case Activity Record (CAR).

Our goal to resolve CAP cases within 5 business days from ATE receipt, as noted in IRM 8.24.1.3(4), will be extended to 5 business days from the end of the 10-day period if the “specified taxpayer” elects to access the file.

Below is an example of a communication with a “specified taxpayer” concerning this issue.

A taxpayer should be referred to the Taxpayer Advocate Service (TAS) (see IRM Part 13, Taxpayer Advocate Service) in accordance with local procedures using a Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), under the following two circumstances:

To the extent possible, complete the Appeals determination before the local TAS office makes a relief determination, since the appeal process may resolve the taxpayer's concerns.

Several collection and examination issues have separate appeal procedures. Advise taxpayers who raise these issues under CAP to proceed with the appropriate appeal procedure. These include:

Also excluded from CAP:

Cases controlled by Criminal Investigation (CI) where CI concurs with the collection activity may be entitled to a CAP. Appeals will generally delay a CAP hearing during the pendency of criminal investigation and proceedings, unless the determination is made consistent with IRM 1.2.1.5.11, Policy Statement 4-26, and that the CAP hearing will not imperil prosecution.

The following table provides the time frames and citations regarding CAP IA appeals:

For a proposed termination of IA, the taxpayer has 30 days from the date of the notice of intent to terminate in which to request an appeal. Unless the taxpayer appeals within 30 days of the date of the notice, or cures the default, the IA will terminate by law. After the termination of the IA, the taxpayer’s right to appeal will continue for an additional 30 days (see above chart).

IRC 7122(e) provides that rejected installment agreements will have an independent administrative review by a designated official within Collection before the rejection is communicated to the taxpayer.

Collection function will input the required TC 971 codes for levy suspension on rejected installment agreements.

The most common reasons for termination are:

When the IRS believes a taxpayer has defaulted on an IA a notice is sent proposing termination. CP 523 is sent for campus cases and Letter 2975 is sent for field cases. Both letters ask the taxpayer to contact the Service or appeal within 30 days. Otherwise, the agreement is terminated.

Terminated installment agreements.

Form 9423, Collection Appeal Request, is recommended for field Collection CAP appeals. This form also provides instructions on how to appeal. While Form 9423 is recommended for CAP appeals, any written request for a CAP hearing will be honored.

Taxpayers can obtain Form 9423 and these publications from the field Collection groups and the Service's web page at http://www.irs.gov/. Employees can obtain these forms from the internal Multimedia web site.

The request for a CAP appeal does not need to be completed prior to the group manager conference. Taxpayers, however, need to let the Collection office know within two (2) business days after the conference with the Collection manager that they plan to submit Form 9423. The Form 9423 must be received or postmarked within three (3) business days of the conference with the Collection manager or collection may resume on all actions except rejected or terminated installment agreements. A conference with the group manager is not required on IA CAP appeals.

If a taxpayer requests a conference and is not contacted by a manager within two (2) business days of making the request, the taxpayer may contact Collection again or submit Form 9423. If the taxpayer chooses to submit Form 9423, the date of the taxpayer's request for a conference and information reflecting he/she was not contacted by a manager should be noted in Block 15 of the Form 9423. The Form 9423 should be received or postmarked within four (4) business days of the taxpayer's request for a conference or collection action may resume.

The originating function needs to separately upload each new CAP receipt to Appeals through the Electronic Case Receipts (ECR) intake site. A Form 15044, Transmittal of Collection Appeals Program (CAP) Hearing Request needs to be completed and included with the CAP appeal.

The information needed for a CAP appeal will be uploaded to the ECR site. Generally, a copy of the entire case file is not necessary and is burdensome. Although infrequent, should additional documentation be necessary, Collection and Appeals, on a case by case basis, may determine together what portion of the file needs to be transmitted to Appeals to adequately consider the appeal. Any communications should be limited to ministerial, administrative or procedural matters and not extend into the merits, accuracy of the facts or strengths and weaknesses of the case (see Rev. Proc. 2012–18, Section 2.03(2) &(3)).

At a minimum, the Appeals file should include:

All Appeals offices have access to the Integrated Data Retrieval System (IDRS) and Integrated Collection System (ICS). The ATE can access the Revenue Officer's ICS case file that includes case history, information on account transactions and the manager's comments regarding the conference. Collection no longer needs to provide paper copies of the following:

The Appeals hearing officer or their manager will contact the Revenue Officer or group manager to obtain additional information within the Service's control or readily available to the Collection employee that is needed to adequately consider the issues raised by the taxpayer.

Seizures are appealable either before the seizure action takes place or after it is completed. However, taxpayers have 10 business days after the Notice of Seizure is received or left at their home or business to appeal to the Collection manager.

The appeal will generally be handled in the Appeals Office serving the taxpayer's home address or in the case of a corporation, the principal place of business.

See IRM 5.1.9, Collection Appeal Rights, for field Collection CAP procedures.

Taxpayers may make an oral request for a CAP appeal on Automated Collection System (ACS) cases. This request for an appeal and a statement about the issue is documented in the Comments section of the ACS Entity Screen.

Taxpayers must speak to the ACS Manager prior to the case being sent to Appeals. CAP cases on liens or levies should be sent to Appeals within two business days of receipt of the taxpayer's or third party's request, subsequent to the conference with the manager, which did not result in a resolution.

The ACS CAP coordinator will upload the following documents to Appeals through the ECR intake site:

To obtain additional ACS case file information, Appeals hearing officers can access Account Management Services (AMS). Further information on AMS can be obtained by accessing http://ams.web.irs.gov. You can also request additional information from the ACS manager.

Upon closing an ACS CAP case, the closing documents (Form 5402, Closing Letter and Appeals Case Memo, if prepared) will be sent via encrypted email to the originating ACS CAP coordinator.

A taxpayer may make an oral request for a CAP appeal on cases which are worked by Accounts Management. These will normally be cases which are not assigned to either ACS or Field Collection.

Form 15044, Transmittal of Collection Appeals Program (CAP) Hearing Request, will be uploaded to Appeals through the ECR intake site.

Customer Service sites have a two business day period to send cases on liens or levies to Appeals. Taxpayers must speak to the Customer Service Manager prior to the CAP being sent to Appeals. Normally the CAP will be forwarded to Appeals by the CAP coordinator for the location where the CAP is received.

In addition to Form 15044, Customer Service personnel should also upload the following documents:

When a CAP case has been forwarded to Appeals, Accounts Management Services will utilize IDRS to input a STAUP for four cycles and to enter a history item indicating a CAP case has been received and forwarded to Appeals.

Upon closing an Accounts Management CAP case, the closing documents (Form 5402, Closing Letter and Appeals Case Memo, if prepared) will be sent via encrypted email to the initiating CAP coordinator.

Appeals hearing officers should treat CAP cases as their first priority (unless a statute will expire on another case within 5 days).

When resource limitations rather than case complexities will not allow cases to be closed in 5 business days from the Appeals hearing officer's receipt, work CAP cases in the following priority:

Employees should hold a conference with the taxpayer within 2 business days of case receipt to allow maximum flexibility for decision-making and paperwork preparation.

The stringent time frames were set for the following reasons:

Phone conferences are common in these cases.

It is vital that the Collection case be fully and clearly documented, since missing and unclear information could cause a case to take more than 5 business days to resolve or result in Appeals reversing the collection action proposed or taken.

If a taxpayer presents new information to Appeals that the Revenue Officer has not considered, Appeals may ask the Revenue Officer to review and comment on the information, but communication may not be conducted ex parte. To the extent the Revenue Officer is expected to orally comment on the accuracy of the new information or the relative importance of the information to Appeals' decision, the taxpayer/representative must be given an opportunity to participate in any discussions with the Revenue Officer. If comments on the information are in writing, the comments should be sent simultaneously to Appeals and the taxpayer. In this event, the taxpayer must be given a reasonable opportunity to respond. See IRM 8.1.10.3.1.3, New Information Received or New Issues Raised.

Appeals should review the case for appropriateness of the action, proposed or taken, based on law, regulations, policy, and procedures (national and local), considering all of the relevant facts and circumstances.

Local procedures will only be considered appropriate if they are written and consistent with the IRM.

Judgment is likely to be an issue on these types of cases, although they can also involve legal or procedural issues. Appeals may reverse the Collection function's action if evaluation of the taxpayer's history and current facts and circumstances indicate that the proposed or taken action is inappropriate.

Due to the extensive investigation and multiple levels of approval required in seizing property, the appropriate approval authority in Appeals must concur before a decision to direct release of a seizure is shared with Collection. If a Collection Area Director approved the seizure, the Director of Collection Appeals must approve the release; if the Collection Territory Manager approved the seizure, the Appeals Area Director must approve the determination to release.

Appeals should inform both the Collection function and the taxpayer of the decision as soon as possible after receiving the necessary approvals to direct release of a seizure.

Appeals' CAP hearing decision is limited to sustaining Collection or otherwise directing Collection to take the appropriate corrective action (e.g., release levy).

The taxpayer's closing letter should clearly outline the following:

Prepare an Appeals Case Memo (ACM). The ACM should include complete instructions on the decisions made and any action that will need to be completed, e.g., establish an IA for XXX amount per month, investigate discharge, whether there are no restrictions on enforcement, etc.

An Appeals Case Memo (ACM), if prepared, is not required to be issued to the taxpayer as an attachment to the closing letter.

The Appeals hearing officer will forward the entire closed CAP case file (i.e. the original documents submitted through the ECR intake site, any additional documents received from the taxpayer/representative during the hearing and the closing documents), via encrypted email, to the ATM for approval.

If the taxpayer filed a Form 911, Request for Taxpayer Advocate Service Assistance, or if the case was otherwise referred to the Taxpayer Advocate Service, provide a copy of the closing letter and the ACM to the controlling local Taxpayer Advocate Service office.

CAP cases should be closed on ACDS as a premature referral (cc 20) in the following instances:

The following are examples of premature referral considerations (when to return and when not to return a CAP as a premature referral):

Appeals does not issue a Uniform Acknowledgment Letter for CAP cases. While there is no requirement to notify the taxpayer the CAP request is being returned to Collection as a premature referral, it is a best practice to send a brief letter to the taxpayer advising the CAP appeal is being returned to Collection, along with the reason for the return (e.g., due to issue excluded from CAP).

Decisions by Appeals are binding on the taxpayer and the Collection function, with certain limited exceptions. The Collection function will take the actions directed by Appeals. However, the default of the agreement by the taxpayer will release the Collection function from the terms of the agreement.

Material misrepresentation of fact or failure to fully disclose any material information by the taxpayer will make any agreement - such as a delay in lien or levy or an IA, etc., - reached on behalf of the Service voidable. Before the Collection function declares an agreement void under this provision, the Collection employee will confer with Appeals as described in IRM 8.24.1.3.10.1, Disagreement with Appeals Decision. If Appeals sustains the Collection function's action(s), the Collection function may resume any suspended actions.

Appeals Centralized Database System (ACDS) type codes are used to track this program:

Closing codes are used under the following circumstances.